Overview
Right now is the absolute best time ever to be getting a geothermal heat pump system. With the newest economic stimulus from Washington DC, more money than ever is being allocated for renewable energy.
There is currently a 30% Federal Tax Credit available towards the installation of a geothermal heat pump system. That is money straight off the top of our taxes, and back into your pocket. This can make an absolutely huge difference in the overall decision for a geothermal system. If you can put 30% of the money it takes to install the system back into your pocket, not pay it to Uncle Sam, and have a lower tax liability and potentially drop a bracket or two, it greatly changes the game.
All of that in addition to the energy savings you will see makes geothermal the most cost effective renewable energy system you can get. No 30-year payback period like you could see from a solar photovoltaic system, or futile attempts at being “green”, just straight money back in your pocket that you would normally pay to the utility companies.
Qualifications
There are a few qualifications that have to be met to receive this tax credit though. First of all, the residence cannot be an income property, such as a rental. It can be a vacation home or a second residence, but cannot be a rental. Second, the geothermal heat pump must meet the requirements of the Energy Star Program at the time the expenditure is made. You can find all of the qualified units on the Energy Star Website (http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=HP). Most heat pump manufacturers meet this standard, and are Energy Star verified. Third, the system must have been placed in service after January 1, 2009 and before December 31, 2016.
All of these requirements are very easy to meet and apply for almost every home out there.
State Renewable Energy Tax Incentives
Many states also have renewable energy tax incentives such as tax credits and tax rebates. Each state is different and has adopted the renewable energy industry differently. Some states have significant rebates, and others have not put incentives in place. For example, here in Montana there is a $1,500 state tax credit available for geothermal systems. Other states such as Alaska don’t have a set incentive, but there are programs in place that can get you a significant rebate. You can check all of the state incentives at the DSIRE Website (www.dsireusa.org).
What is included in the tax credit?
What can be included in this tax credit is a whole different issue that is a somewhat controversial one across the industry. We will be writing another whole article about that, to see what is covered and what isn’t.
Geothermal Info
If you are not familiar with geothermal heating, you can find free basic information about it and other renewable heating and cooling technologies at Renewable Heating 101.
Forms / Resources
IRS Form 5695 – Residential Energy Credits – http://www.irs.gov/pub/irs-pdf/f5695.pdf
Dsire USA- http://www.dsireusa.org
Energy Star – Geothermal Heat Pumps – http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=HP
GeothermalHelp.com is your online resource and community for everything having to do with geothermal heating (aka ground source heat pumps, geoexchange, etc.). We have a large database of information about anything having to do with geothermal, including ground loops, costs, tax credit issues, maintenance, and much more. We also provide product reviews for the new products entering the industry. There is also a large directory of installers and other geothermal professionals throughout the United States and Canada. Have a question? Shout it on our forum and get expert advise from qualified professionals around the country.
If you’re a homeowner and planning to have some home improvements projects in your house to make it more energy efficient, now is the perfect time to do so! Why? Because there are federal energy tax credits available for consumers who make energy-conscious purchases and home improvements.
Energy tax credits are offered at 30% of the cost up to $1,500 in 2009 and 2010 for the following:
• Windows and doors (exterior windows, skylights, storm windows, exterior doors, storm doors)
• Roofing (metal roofs and asphalt roofs)
• Insulation
• HVAC (heating and air – all types)
• Water heaters
These tax credits are for existing homes only.
Other homeowner energy tax credits that are available at 30% of the cost with no upper limit are:
• Geothermal heat pumps
• Solar panels
• Solar water heaters
• Small wind energy systems
• Fuel cells
The above tax credits on the other hand, are offered for both existing homes and those under construction, until 2016.
Taking advantage of these energy tax credits is so much easier than availing of home improvement grants. For one home improvement grants are not readily accessible to the average homeowner. While free government home improvement grants do exist, there is limited information for these so you’d really need to be patient in your search. And even when you find one where you may qualify for, the application process is lengthy and tedious, and the results depend largely on whether your city or state has the available funding.
But with the federal energy tax credits, the savings you get are as good as a done deal – no applications or proposals needed!
So if you have some home improvement plans in mind anyway, why not go green? Your overall savings is two-fold: you get your energy tax credits, and you save on electricity and heating costs by making your home energy efficient.
If you are looking for a handyman in Edina, MN, be sure to visit the Edina handyman directory to find a contractor who can help you take advantage of these tax credits!
